Watchdog Group May Challenge Tax Limit

TALLAHASSEE — A government watchdog group announced Thursday that it is considering a legal challenge to a voter-approved initiative in 1992 that limits property-value increases.

The constitutional amendment preventing county property appraisers from radically increasing assessments until the sale of a home is unfair because some property owners end up paying higher taxes for similar properties, said Florida TaxWatch President Dominic Calabro.

The state Department of Revenue agrees with TaxWatch.

Revenue Director Larry Fuchs has called the amendment a tax break for the rich, because their properties' market values rise while their tax burden lags behind.

''We joined with TaxWatch because we have the responsibility to make sure all Floridians are treated equally when it comes to taxes,'' Fuchs said. ''Under this amendment people are not being treated fairly.''

Calabro plans to take his argument to the Florida Supreme Court.

''When you treat the same type of taxpayers unequally you are going to have problems,'' Calabro said. ''Similar homes which are right next to each other can have vastly different values and pay different taxes.''

Amendment supporters, however, argue that inequities already exist between properties of similar value.

''You can have three exact houses next to each other and each will pay different property taxes,'' said Richard Crotty, Orange County property appraiser. ''The first house may not have a homestead exemption, the next may and the third may have something else. Each pay different taxes.''

Crotty and Lee County Property Appraiser Ken Wilkinson, who drafted the Save Our Homes proposal, insist that local officials have simply adjusted their budgets to deal with less money.

''Budgets are nothing but the establishment of priorities,'' Wilkinson said. ''The counties are just dealing with less.''

The Save Our Homes amendment, which won 53 percent of the vote in 1992, limits property-value increases to 3 percent or the rate of inflation, whichever is lower. The property is reassessed at current market value only when it is sold or loses its homestead exemption.

The group also is concerned that the reduced amount of taxable property costs local governments tax revenues.

The amendment has slowed growth in counties' tax bases, resulting in a decrease in local taxable property values of $3.4 billion in 1995. That means local governments statewide could lose $76.7 million in new taxes if they don't find the money by other means.

Calabro, however, said governments are shifting that burden to others, such as renters, property owners who don't have a homestead exemption and businesses.

The governor and Cabinet are expected to review the amendment this month to decide whether the department implemented it fairly.

Calabro said TaxWatch is researching a legal challenge and will decide soon whether to sue the state on the grounds it is unconstitutional to treat taxpayers differently.

Calabro concedes that the amendment was well-intended and that something is needed to restrain local governments from excessive property taxes, but added the proposal was poorly designed.

''The problem is that by preventing one problem it has created another,'' Calabro said. ''This demonstrates how careful we need to be when we amend the state constitution.''